Boston Scientific Pays $1.6B For American Medical System's Men's Health Devices
American Medical System’s (AMS) men’s health product portfolio is moving from Endo to Boston Scientific in a deal worth $1.6 billion, plus a $50 million bonus if certain market milestones are achieved in 2016. AMS leadership indicates that the shift in ownership will put AMS products in a better position to further expand.
Endo acquired AMS, along with its portfolio of women’s and men’s urological products, in 2011. Bloomberg noted at the time that the $2.9 billion deal was one of Endo’s biggest acquisitions in recent years.
At the time, then-CEO Dave Holveck told Bloomberg that the move was meant to diversify Endo’s portfolio, which was dominated by Lidoderm, a topical anesthetic patch. “The deal adds to our core urology franchise, bringing us innovation,” said Holveck.
According to Minneapolis’ Star Tribune, the marriage of devices and pharmaceuticals wasn’t necessarily a happy one for Endo and, in recent years, Endo also has been working to resolve litigation involving AMS’ vaginal mesh.
“The combination of those issues might have been enough for them to throw in the towel on the device side,” said Tao Levy, stock analyst for Wedbush Securities, in the Star Tribune article.
Rajiv De Silva, current CEO of Endo, said in a press release that the divestiture of its AMS men’s health devices would allow Endo to sharpen its focus and transform its existing portfolio.
Boston Scientific stated through a press release that AMS’ men’s health devices would join its existing portfolio of urological and women’s health devices to become Boston Scientific Urology and Pelvic Health, which will continue to invest in gynecological surgical solutions, as well.
“Urology is a healthy growing market,” said Karen Prange, president of Boston Scientific’s urology and women’s health division, in an interview with the Star Tribune. “The companies together will have…devices to treat 50 percent of all urology surgical procedures.”
The Star Tribune reported that urologic and pelvic health business was a $4 billion market expected to grow another 4-to-6 percent by 2019.
Camille Farhat, president of AMS under Endo, said in a press release that the Boston Scientific deal was great for AMS’ future growth prospects, and commented that AMS was “now positioned for further expansion as part of Boston Scientific.”
Boston Scientfic also announced an investment and distribution deal with Preventice, a firm developing heart monitoring equipment, and Boston Scientific executives expressed interest in additional mergers and investments to spur growth.
“There are a lot of small technology companies out there continuing to do some innovative things that create value for the health care system, and so we continue to look at opportunities to expand,” said Prange.